The national debate on diverse approaches or strategies to achieve sustainable and inclusive economic growth has intensified with greater clarity on how long-term stability is linked to improving productivity and competitiveness across all sectors of the economy.

Similarly, all stakeholders need to be taken on board and actively help evolve a common minimum programme and action plan for the correction course.

On a positive note, Finance Minister Muhammad Aurangzeb said on Nov 30 that the government was making a decisive shift towards an inclusive, private-sector-driven and export-led growth model. Earlier, he told a Pakistan Business Council (PBC) event that the policy focus was shifting towards steady, sustainable growth that could break recurring boom-and-bust cycles.

Expecting a “good” National Finance Commission output, he said both the federation and the provinces would have to contribute to enhance revenue mobilisation to run the country sustainably. “You cannot run the country on an eight to 10 per cent tax-to-GDP ratio.”

In another PBC session, Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan said exports must grow faster than imports to ease pressure on the economy and secure long-term stability. As for now, the trade deficit has further widened by 37pc to $15.5 billion in 5MFY26.

International collaboration aside, Pakistan must create an ecosystem where experimentation is rewarded, and ideas can move freely between universities, firms, and the market

A stronger export performance requires support for manufacturing and local production, adding that producing key inputs such as steel domestically is necessary to expand export capacity. Pakistan should strengthen domestic investment before relying on foreign investors. Faster economic progress, he said, is needed to create employment.

According to the Labour Force Survey 2024-25, the number of unemployed individuals surged from 4.5 million in FY21 to 5.9m in FY25.

A crucial lesson learnt was that foreign direct investment will only follow once local investors are engaged, acknowledged the National Coordinator of the Special Investment Facilitation Council, Lt Gen Sarfraz Ahmed, in a meeting with the PBC held later on Nov 2.

On Dec 3, Prime Minister Shahbaz Sharif reportedly issued instructions to take up a tax relief proposal for the corporates and salaried class with the International Monetary Fund; the proposal suggests a Rs975bn income-tax relief package.

‘The private sector should also pursue partnerships and joint ventures abroad, technology transfer, and knowledge exchange to improve productivity and competitiveness at home’

Furthermore, the Competition Commission of Pakistan (CCP) and the Federal Antimonopoly Service of the Russian Federation have signed a memorandum of understanding to enhance bilateral cooperation in the field of competitive policy. According to a CCP statement, “It was a significant step toward deepening institutional coordination, promoting fair market practices, and strengthening economic ties between the two countries.”

In a related development, China promises to extend a helping hand more comprehensively. “We will promote the inclusion of more Pakistani agricultural products under contract farming cooperation and facilitate the export of more high-quality agricultural products to China. Furthermore, we will continue to support industrial park cooperation, making new and greater contributions to Pakistan’s export expansion and foreign exchange earnings,” says Chinese Ambassador Jiang Zaidong.

But, international collaboration aside, Waqar Wadho, Associate Professor of Economics at the Lahore School of Economics, urges, “When ideas stop, economies stall. For Pakistan, the task is not merely to import technologies or replicate policies. It is to create an ecosystem where experimentation is rewarded, where failure is tolerated, and where ideas can move freely between universities, firms, and markets.”

With inputs from technocrats, a democratic political approach is required to resolve structural reforms.

State Bank of Pakistan (SBP) Governor Jameel Ahmed says only by moving together — the government, SBP and the private sector — can we ensure sustainable and inclusive growth. “Our firms must align their workforce development with changing market needs. The private sector should also pursue partnerships and joint ventures abroad, technology transfer, and knowledge exchange to improve productivity and competitiveness at home,” he said.

A recent Dawn editorial noted that unless the government reforms the investment regime to guarantee every investor — local or foreign, small or large — an equal opportunity to succeed based on their market performance, the current trends will persist. What the economy needs at the moment is productivity, governance and business reforms to find a way out of its current troubles through exports.

Speaking at a PBC meeting, PBC Chairperson Dr Zeelaf Munir highlighted the role of productive businesses in national progress, adding that growth requires predictability, fairness, and confidence for businesses, and that sustainable progress requires partnership between government, business, academia, and civil society.

The Population Council’s District Vulnerability Index for Pakistan (DVIP) offers a data-driven picture of vulnerabilities both at the provincial and district levels and focuses on the outcome of underlying structural and systemic factors.

In short, analysts at Dawn say that the DVIP report underpins two key points about our development landscape. First, the country’s challenges stem not only from limited resources but, more critically, from deep inequalities in how those resources and essential services are distributed across regions and communities.

Second, these entrenched vulnerabilities mean that those already left behind are both more exposed to disasters and far less likely to catch up with the better-developed areas.

Published in Dawn, The Business and Finance Weekly, December 8th, 2025